Introductory APR period

What is an introductory APR period?

For new credit cards, the introductory period is the length of time during which the introductory APR applies, either for purchases, balance transfers or both. After the introductory period, the card’s APR increases to its regular rate.

Deeper definition

Introductory APR offers may apply to purchases made with your new card, balance transfers to the card or both. These offers are listed separately within the terms and conditions of your card agreement. Introductory APR offers are often zero percent and last up to 21 months, depending on your specific card.

Cards with introductory APRs on purchases can be used to help fund big purchases, like furniture after moving into a new home, while introductory balance transfer APRs are best for paying off existing debts.

Introductory APR period example

Steve is renovating his kitchen and wants to purchase $10,000 worth of new kitchen appliances. He can’t complete the purchase at once, but he doesn’t want to accrue interest paying it off with a loan. Steve opens a credit card with an introductory purchase APR period of 12 months and receives a credit limit high enough to accommodate the cost of his new appliances. He pays his $10,000 balance off over the 12 months by making monthly $833.34 payments and doesn’t owe any additional interest once the introductory period ends.

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